It's easy to do some background checking on a company before you give them your money, and not doing so can be costly, as some clients of now-bankrupt J.K. Harris have learned.
Not to pick on J.K. Harris, but in my reporting role, I wrote a number of stories about the now-defunct nationwide tax resolution service based in Goose Creek, and it's a good example.
Following years of consumer complaints, lawsuits and cash-flow problems, the company sought bankruptcy protection in October just as the Texas attorney general was heading to court aiming to put it in receivership. Then, at the end of December, the company shut down for good and went into liquidation.
Over the weeks that followed, I received calls from people in New England, Texas, Florida and other states who had signed on as new J.K. Harris clients as recently as December. The company had been in bankruptcy for two months at the time, and anyone who gives money to a bankrupt company has to get in line with, and sometimes behind, other creditors if they hope to get any of it back.
Even before the company declared bankruptcy, there had been story after story about attorneys general in multiple states filing complaints against it.
I won't offer an opinion about the validity of the complaints, which the company agreed to pay millions of dollars to settle, but if I were about to give a company thousands of dollars to resolve my tax problems, I would want to know about such claims ahead of time.
In the pre-Internet days, it wasn't easy to learn about a company's reputation and any legal entanglements they might be facing. But these days, it's a more simple matter.
Simply plugging a company's name into a search engine such as Google, Yahoo or Bing and checking out the first few pages of results is a good start.
Anyone who took that step last fall would have known that JK Harris & Co. had filed for bankruptcy, and had a long record of consumer complaints.
Another red flag that you might spot online is an ominous suggestion from a search engine.
For example, if you search for JK Harris on Google, you would see a list of related searches that includes "JK Harris class action suit" and "JK Harris complaints." These are clues that you might want to try those search terms and see what pops up.
The Better Business Bureau is another standby for checking out a company. You can do that online at bbb.org. This website should indicate if there have been lots of complaints against a company.
For companies in your area, another route that you can take is peeking at the local court records, which is easy to do in many counties, thanks to online filing systems.
Many larger counties allow people to freely search through online court records, which will show if a company is facing lawsuits, or if they tend to sue people often.
The fact that a business being sued may not be reason enough to avoid them. Companies get sued for lots of reasons. But if a company is the subject of serious or frequent complaints, at a minimum, that's a good reason to ask some tough questions.
Some states also have robust consumer protection agencies that track troublesome companies, unscrupulous contractors and so on.
Unfortunately, South Carolina is not one of those states.
The "buyer beware" list maintained by the state Department of Consumer Affairs hasn't been updated in two years because of what officials there said was a lack of funding.
Reach David Slade at 937-5552 and on Twitter at @DSladeNews.